Finder File Edit View Go Window Help A Screenshot 2024-04-08 at 1... @ ୪ .0 Mon Apr 8 1:35 AM Screenshot 2024-04-08... Sales S (732,000) $ (367,000) $ 150,000 $ Cost of goods sold 481,100 224,200 9,375 949,000 714,675 x Operating expenses 197,185 76,400 76,597 X Required A Required B Show how Pulaski determined the $423,453 Investment in Sheridan account balance. Assume that Pulaski defers 100 pc of downstream intra-entity profits against its share of Sheridan's income. Note: Amounts to be deducted should be indicated with a minus sign. Consideration transferred Equity in earnings of Sheridan (34,189) 0 34,189 Separate company net income Consolidated net income (87,904) (66,400) To noncontrolling interest To Pulaski, Incorporated Retained earnings 1/1/24 $ 384,600 Net income (774,600) (87,904) (282,800) (66,400) $ 2023 ending inventory profit deferral 350,411 Dividends declared 47,900 18,600 Excess fair value amortization 313,700 X Retained earnings 12/31/24 $ (814,604) $ (330,600) Increase in Sheridan's retained earnings 1/1/23 to 1/1/24 28,900 × 693,011 Pulaski's equity in earnings of Stinson for 2024 Cash and receivables Inventory $ 277,400 $ 150,500 260,500 131,200 Sheridan 2024 dividends declared to Pulaski Investment account balance 12/31/24 $ 1,077,611 Investment in Sheridan Buildings (net) 423,453 0 (1,057,400) ☑ (154,304) X 66,500 X $ (11,455,204) × $ 427,900 391,700 X 423,453 X 338,000 205,300 543,300 241,300 89,100 330,400 0 23,600 23,600 000 Equipment (net) Patents (net) Required A Required B > Unpatented technology Trade name Total assets Liabilities Common stock Noncontrolling interest 1/1/24 Noncontrolling interest 12/31/24 Retained earnings 12/31/24 Total liabilities and equities $ 1,540,653 $ 599,700 (426,049) (300,000) (169,100) (100,000) $ 2,140,353 X (595,149) (400,000) x (814,604) (330,600) 1,145,204 X $ (1,540,653) $ (599,700) $ 193,564 $ 0 $ 2,815,346 x 101 APR 8 wwwww2 A ☑ P W
On January 1, 2023, Pulaski, Incorporated, acquired a 60 percent interest in the common stock of Sheridan, Incorporated, for $384,600. Sheridan's book value on that date consisted of common stock of $100,000 and
Intra-entity inventory sales between the two companies have been made as follows:
Year | Cost to Pulaski | Transfer Price to Sheridan | Ending Balance (at transfer price) |
---|---|---|---|
2023 | $ 127,200 | $ 159,000 | $ 53,000 |
2024 | 112,500 | 150,000 | 37,500 |
The individual financial statements for these two companies as of December 31, 2024, and the year then ended follow:
Items | Pulaski, Incorporated | Sheridan, Incorporated |
---|---|---|
Sales | $ (732,000) | $ (367,000) |
Cost of goods sold | 481,100 | 224,200 |
Operating expenses | 197,185 | 76,400 |
Equity in earnings in Sheridan | (34,189) | 0 |
Net income | $ (87,904) | $ (66,400) |
Retained earnings, 1/1/24 | $ (774,600) | $ (282,800) |
Net income | (87,904) | (66,400) |
Dividends declared | 47,900 | 18,600 |
Retained earnings, 12/31/24 | $ (814,604) | $ (330,600) |
Cash and receivables | $ 277,400 | $ 150,500 |
Inventory | 260,500 | 131,200 |
Investment in Sheridan | 423,453 | 0 |
Buildings (net) | 338,000 | 205,300 |
Equipment (net) | 241,300 | 89,100 |
Patents (net) | 0 | 23,600 |
Total assets | $ 1,540,653 | $ 599,700 |
Liabilities | $ (426,049) | $ (169,100) |
Common stock | (300,000) | (100,000) |
Retained earnings, 12/31/24 | (814,604) | (330,600) |
Total liabilities and equities | $ (1,540,653) | $ (599,700) |
Note: Parentheses indicate a credit balance.
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Screenshot 2024-04-08 at 1...
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.0
Mon Apr 8 1:35 AM
Screenshot 2024-04-08...
Sales
S
(732,000) $ (367,000) $
150,000
$
Cost of goods sold
481,100
224,200
9,375
949,000
714,675 x
Operating expenses
197,185
76,400
76,597 X
Required A Required B
Show how Pulaski determined the $423,453 Investment in Sheridan account balance. Assume that Pulaski defers 100 pc
of downstream intra-entity profits against its share of Sheridan's income.
Note: Amounts to be deducted should be indicated with a minus sign.
Consideration transferred
Equity in earnings of Sheridan
(34,189)
0
34,189
Separate company net income
Consolidated net income
(87,904)
(66,400)
To noncontrolling interest
To Pulaski, Incorporated
Retained earnings 1/1/24
$ 384,600
Net income
(774,600)
(87,904)
(282,800)
(66,400)
$
2023 ending inventory profit deferral
350,411
Dividends declared
47,900
18,600
Excess fair value amortization
313,700 X
Retained earnings 12/31/24
$
(814,604) $
(330,600)
Increase in Sheridan's retained earnings 1/1/23 to 1/1/24
28,900 × 693,011
Pulaski's equity in earnings of Stinson for 2024
Cash and receivables
Inventory
$
277,400 $
150,500
260,500
131,200
Sheridan 2024 dividends declared to Pulaski
Investment account balance 12/31/24
$
1,077,611
Investment in Sheridan
Buildings (net)
423,453
0
(1,057,400) ☑
(154,304) X
66,500 X
$ (11,455,204) ×
$
427,900
391,700 X
423,453 X
338,000
205,300
543,300
241,300
89,100
330,400
0
23,600
23,600
000
Equipment (net)
Patents (net)
Required A
Required B >
Unpatented technology
Trade name
Total assets
Liabilities
Common stock
Noncontrolling interest 1/1/24
Noncontrolling interest 12/31/24
Retained earnings 12/31/24
Total liabilities and equities
$ 1,540,653
$
599,700
(426,049)
(300,000)
(169,100)
(100,000)
$
2,140,353 X
(595,149)
(400,000) x
(814,604)
(330,600)
1,145,204 X
$ (1,540,653) $ (599,700) $
193,564
$
0
$
2,815,346 x
101
APR
8
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A
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P
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